Helen Green

The Late Payment Disease

As you lead so shall they follow’ runs the saying but in this age of social media awareness it could equally read ‘as you lead so shall the reputation of your organisation be created.’ The thought came to mind when I was reading about a survey into late payment excuses which was run by FreeAgent.

Unsurprisingly the my dog ate your invoice excuse featured in the responses received but so too did the chief executive being on a sailing holiday, we haven’t used your work yet and pets being ill (perhaps from eating all those invoices). Whether it is worse to receive one of these outlandish excuses or simply to be on the receiving end of a wall of silence is a moot point, but the fact is that late payments place a huge strain on business.

What’s this got to do with leadership? Quite simply, a business doesn’t fall into the habit of paying late unless that culture is condoned by the leadership. And when it happens, the leadership are sending out a clear signal that profit comes before people and that they care little for the well-being of their suppliers. The knock-on effect is to create a culture of contempt within the organisation which will eventually spread to the way in which customers and even fellow employees are treated.

But in the social media age, naming and shaming is becoming increasingly prevalent. Businesses which care little for people and the welfare of others will sooner or later start to build a negative reputation and in response customers will leach away and prospective employees will think twice before joining the organisation. What does your payment culture say about your leadership? Perhaps it’s time you thought again.